New York Woman Who Assisted Ponzi Schemer is Sentenced

New York Woman Who Assisted Ponzi Schemer is Sentenced

Deirdre M. Daly, United States Attorney for the District of Connecticut, today announced that CHRISTINE HERNANDEZ, 43, of Yonkers, N.Y., was sentenced yesterday by U.S. District Judge Vanessa L. Bryant in Hartford to three years of probation for assisting Michael Goldberg’s decade-long Ponzi scheme.

According to court documents and statements made in court, for more than a decade, Michael Goldberg, a resident of Connecticut, ran a Ponzi scheme that took in more than $100 million from investors. The vast majority of Goldberg’s fraud involved his solicitation of individuals and organizations to invest money in the purchase of distressed assets from JP Morgan Chase Bank (“Chase”). Goldberg falsely represented to potential investors in these “Chase asset deals” that Chase had granted him a contractual right to purchase foreclosed and seized business assets from a Chase Foreclosure Manifest, which he would then resell in prearranged transactions to large, well-known corporations. Goldberg represented that his purchase and resale of these foreclosed assets would enable him to pay investors a return on capital of up to 20 percent in a short period of time, typically 90 days. In addition, Goldberg represented that Chase would refund the purchase price of any asset that could not be resold, and that therefore there was no risk to the investor that any principal investment would be lost. In fact, Goldberg had no relationship with either Chase or with the supposed purchasers of the distressed assets, and the “Chase asset deals” did not exist.

Goldberg paid investors with funds received from new investors. When his scheme was revealed, Goldberg had defrauded investors out of more than $30 million.

In 2008 and 2009, HERNANDEZ assisted Goldberg in concealing aspects of his scheme by posing as a Chase employee on three occasions at a bank branch in New York City, and also on at least one conference call, in order to confirm to investors Goldberg’s relationship with Chase so that those investors would continue to place money with Goldberg. HERNANDEZ also participated in investor phone calls under her own name and claimed to be a Chase contractor checking inventory that would be available to Goldberg’s supposed corporate “customers.”

HERNANDEZ was unaware that the Chase asset deals did not exist, but believed that she was helping to prevent investors from going directly to Chase, thereby cutting Goldberg out of the purported asset deals.

On March 23, 2015, HERNANDEZ waived her right to indictment and pleaded guilty to one count of misprision of a felony.

On September 13, 2010, Goldberg pleaded guilty to three counts of wire fraud. On May 16, 2011, he was sentenced to 120 months of imprisonment and was ordered to pay restitution in the amount of $31,023,035.40.

This matter was investigated by the Federal Bureau of Investigation and was prosecuted by Assistant U.S. Attorney David E. Novick.